Case No.

10

Agabon v NLRC G.R No. 158693

**make sure you’ve understood Serrano v NLRC (Case No. 9) ‘cause in this case, giabandon ang ruling reg
payment of full backwages. Sorry taas ang digest, taas lang jud ang case. I tried to simplify as much as
possible**

FACTS:

1. Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and
installing ornamental and construction materials. It employed petitioners Virgilio Agabon and
Jenny Agabon when they were dismissed for abandonment of work.
2. Petitioner’s filed a case for illegal dismissal and payment of money claims.
3. Employee’s (Petitioner) Contention:
 they were dismissed because the private respondent refused to give them assignments
unless they agreed to work on a "pakyaw" basis
 They did not agree on this arrangement because it would mean losing benefits as Social
Security System (SSS) members
 private respondent did not comply with the twin requirements of notice and hearing.
(**important**)
4. Employer’s (Respondent) Contention:
 that petitioners were not dismissed but had abandoned their work.
 employer sent two letters to the last known addresses of the petitioners advising them to
report for work.
 petitioners did not report for work because they had subcontracted to perform
installation work for another company
 Petitioners also demanded for an increase in their wage to P280.00 per day. When this
was not granted, petitioners stopped reporting for work

LABOR ARBITER RULING: Declared the dismissals illegal and ordered private respondent to pay the
monetary claims.

NLRC RULING: Reversed LA decision. Petitioners had abandoned their work, and were not entitled to
backwages and separation pay. Other monetary claims denied for lack of evidence.

CA RULING: Petitioner’s dismissal was not illegal because they had abandoned their employment, but
ordered the payment of money claims

1st ISSUE: WON Petitioners were illegally dismissed? – NO

RULING:

Laws applicable:

Article 282 of the Labor Code (just causes for termination by the employer):

1. serious misconduct or willful disobedience by the employee of the lawful orders

of his employer
 2. gross and habitual neglect by the employee of his duties
3. fraud or willful breach by the employee of the trust reposed in him by his employer
4. commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family
5. other causes analogous to the foregoing

Abandonment is the deliberate and unjustified refusal of an employee to resume his

employment. It is a form of neglect of duty, hence, a just cause for termination of
employment by the employer.

For a valid finding of abandonment, these two factors should be present:

1. the failure to report for work or absence without valid or justifiable

reason
2. a clear intention to sever employer-employee relationship, manifested
by overt acts from which it may be deduced that the employees has no
more intention to work. The intent to discontinue the employment must
be shown by clear proof that it was deliberate and unjustified.

In February 1999, petitioners were frequently absent having subcontracted for an installation work for
another company. Subcontracting for another company clearly showed the intention to sever the
employer-employee relationship with private respondent. This was not the first time they did this. In
January 1996, they did not report for work because they were working for another company. Private
respondent at that time warned petitioners that they would be dismissed if this happened again.
Petitioners disregarded the warning and exhibited a clear intention to sever their employer-employee
relationship. The record of an employee is a relevant consideration in determining the penalty that should
be meted out to him.

In Sandoval Shipyard v. Clave, we held that an employee who deliberately absented from work without
leave or permission from his employer, for the purpose of looking for a job elsewhere, is considered to
have abandoned his job.

We should apply that rule with more reason here where petitioners were absent because they were
already working in another company.

2nd ISSUE: WON Respondents followed due process for terminating employees? – No

RULING:

After establishing that the terminations were for a just and valid cause, we now determine if the
procedures for dismissal were observed.

Laws applicable:

Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code
(procedure for terminating an employee)

Standards of due process: requirements of notice. – In all cases of termination of

employment, the following standards of due process shall be substantially
observed:
 I. For termination of employment based on just causes as defined in Article 282
of the Code:

(a) A written notice served on the employee specifying the ground or

grounds for termination, and giving to said employee reasonable opportunity
within which to explain his side;

(b) A hearing or conference during which the employee concerned, with

the assistance of counsel if the employee so desires, is given opportunity to
respond to the charge, present his evidence or rebut the evidence presented
against him; and

(c) A written notice of termination served on the employee indicating

that upon due consideration of all the circumstances, grounds have been
established to justify his termination.

In case of termination, the foregoing notices shall be served on the

employee's last known address.

Dismissals based on just causes contemplate acts or omissions attributable to the

employee while dismissals based on authorized causes involve grounds under the Labor
Code which allow the employer to terminate employees.

From the above rules, four possible situations may be derived:

1. the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause
under Article 283, or for health reasons under Article 284, and due process was observed
2. the dismissal is without just or authorized cause but due process was observed
3. the dismissal is without just or authorized cause and there was no due process
4. the dismissal is for just or authorized cause but due process was not observed

In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability.

In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee
is entitled to reinstatement without loss of seniority rights and other privileges and full backwages,
inclusive of allowances, and other benefits or their monetary equivalent computed from the time the
compensation was not paid up to the time of actual reinstatement.

In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it
should not invalidate the dismissal. However, the employer should be held liable for non-compliance with
the procedural requirements of due process.

The present case squarely falls under the fourth situation. The dismissal should be upheld because it
was established that the petitioners abandoned their jobs to work for another company.

Private respondent, however, did not follow the notice requirements and instead argued that sending
notices to the last known addresses would have been useless because they did not reside there
anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates
the twin notice requirements to the employee's last known address. Thus, respondent should be held
liable for non-compliance with the procedural requirements of due process.
Relevant Jurisprudence (**Why gi abandon si Serrano?):

1. Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was not given
any notice.
2. Wenphil v NLRC – where the employer had a valid reason to dismiss an employee but did not
follow the due process requirement, the dismissal may be upheld but the employer will be
penalized to pay an indemnity to the employee (Wenphil or Belated Due Process Law)
3. Serrano v NLRC - the rule on the extent of the sanction was changed. We held that the violation by
the employer of the notice requirement in termination for just or authorized causes was not a denial
of due process that will nullify the termination. However, the dismissal is ineffectual and the employer
must pay full backwages from the time of termination until it is judicially declared that the dismissal
was for a just or authorized cause.

The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant number of cases
involving dismissals without requisite notices. Serrano was confronting the practice of employers to "dismiss
now and pay later" by imposing full backwages.

We believe, however, that the ruling in Serrano did not consider the full meaning of Article 279 of the Labor
Code. Payment of backwages and other benefits, including reinstatement, is justified only if the employee
was unjustly dismissed.

After carefully analyzing the consequences of the divergent doctrines in the law on employment termination,
we believe that in cases involving dismissals for cause but without observance of the twin requirements of
notice and hearing, the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that
the dismissal was for just cause but imposing sanctions on the employer. Such sanctions, however, must be
stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve a fair result by dispensing
justice not just to employees, but to employers as well.

3rd ISSUE: WON Respondents should pay Petitioners for holiday pay, SIL, and 13th month (money claims) - YES

RULING:

As a general rule, one who pleads payment has the burden of proving it. Even where the employee must
allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather
than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files
are not in the possession of the worker but in the custody and absolute control of the employer.

In the case at bar, if private respondent indeed paid petitioners' holiday pay and service incentive leave pay,
it could have easily presented documentary proofs of such monetary benefits to disprove the claims of the
petitioners. But it did not, except with respect to the 13th month pay wherein it presented cash vouchers
showing payments of the benefit in the years disputed. Allegations by private respondent that it does not
operate during holidays and that it allows its employees 10 days leave with pay, other than being self-
serving, do not constitute proof of payment.